Agricultural Policy Monitoring and Evaluation 2025

21. New Zealand

Main findings

Support to agriculture

Support to agricultural producers in New Zealand consistently ranks among the lowest in the OECD. During 2022-24, the Producer Support Estimate (PSE) averaged 1.2% of gross farm receipts, higher than the 0.5% reported for 2000-02 but far below the OECD average.

Almost all prices align with world market prices. Exceptions are fresh poultry and table eggs, and some bee products, which cannot be imported into New Zealand due to biosecurity regulations. These restrictions result in some market price support (MPS, the only form of support to individual commodities in New Zealand), amounting to 57% for eggs in 2022-24. Additional minor producer support is provided through on-farm services, mainly related to animal health and disaster relief.

Thanks to structurally low producer support, around 70% of all support to the sector for most of the past two decades was for general services, even though this share has declined recently due to the increased MPS for eggs. However, such support (General Service Support Estimate, GSSE) is estimated at just 1.7% of the value of agricultural production during 2022-24, well below the OECD average. It mainly focuses on animal disease control and on investments in the agricultural knowledge and innovation system.

Total support to the sector represented just 0.26% of Gross Domestic Product (GDP) during 2022‑24. This level is slightly higher than two decades earlier but remains at less than half the average share across the OECD.

Key recent policy changes

Biosecurity controls were introduced and certification of live and raw poultry products were temporarily suspended subsequent to the detection of the H7N6 strain of high pathogenicity avian influenza (HPAI) in December 2024. After culling of all chickens on the affected farm and testing and monitoring chicken farms linked to it, as of late April 2025, the H7N6 strain of HPAI in New Zealand was eradicated. Exports of some poultry products have since resumed and movement controls lifted.

The New Zealand-European Union Free Trade Agreement entered into force in May 2024. This is of the first FTAs globally to include a Sustainable Food Systems chapter. It also provides for tariff eliminations and reductions for key export products of New Zealand.

The New Zealand-United Arab Emirates Comprehensive Economic Partnership Agreement (CEPA) was signed in January 2025, foreseeing the elimination of duties on 99% of New Zealand’s exports, including all of New Zealand’s major agricultural exports, within three years. The CEPA also covers issues such as intellectual property, sustainable development, labour, sustainable agriculture, climate, indigenous trade, and opportunities for Māori. This agreement is New Zealand’s first FTA with a Middle Eastern country.

Assessment and recommendations

• The absence of any formal trade barriers underlines New Zealand’s strong trade focus, facilitated by its large and increasing number of FTAs. New Zealand’s Import Health Standards (IHS) represent a key tool for its biosecurity vis-à-vis imported products. However, some livestock products (including eggs, fresh chicken meat, and honey) cannot be imported into New Zealand because no IHS has been developed for them. While these products represent a small share of New Zealand’s agricultural output and consumption, the recent increase in domestic prices for eggs compared to prices on international markets means that, on average, one-third of the measured support to the sector has been financed by consumers and first-stage buyers through higher prices during 2022-24. Enabling imports, including in times of domestic shortages, through the development of relevant IHS would provide consumers lower prices and larger choice without compromising biosecurity.

• New Zealand is among the countries active in incorporating environmental co-operation provisions specific to the agro-food sector in trade agreements, highlighting the country’s efforts to reconcile environmental and trade objectives. Focussed environmental co-operation in agro-food can be an important means for achieving tangible improvements of the sector’s performance, and assessing the outcomes of these provisions could help make any adjustments needed to fully realise this potential.

• Kiwifruit exports to markets other than Australia, and by entities other than Zespri (the main company), continue to be subject to regulatory authorisation by Kiwifruit New Zealand. New Zealand should ease these restrictions, as they burden participation in kiwifruit exports by other firms wishing to do so, reducing competition and efficiency in the kiwifruit trade.

• New Zealand’s agricultural productivity growth has been slowing significantly and, according to the latest data, even turned slightly negative over the past decade. At the same time, the country maintains high nitrogen and phosphorus balances, and its ruminant livestock sector is responsible for a large share of the country’s GHG emissions. To address these challenges, significant sustainable productivity improvements will be needed.

• While New Zealand’s share of public spending on agriculture dedicated to R&D and knowledge transfer is well above the OECD average and focus on productivity growth and emission reductions of the sector, public expenditures for the agricultural knowledge and innovation system remain below the OECD average when measured against the size of the sector. Additional targeted funding could be considered to foster sustainable productivity growth.

• In addition to R&D efforts to reduce the emission intensity, notably of its livestock industry, pricing has been shown to be the most efficient way to reduce net GHG emissions. New Zealand’s Emissions Trading Scheme is an important tool used for much of the country’s economy. However, plans for inclusion of agriculture within this scheme have been shelved, leaving this instrument unused for a large share of New Zealand’s emissions. Including agriculture in an economy-wide emissions trading scheme would allow meeting New Zealand’s emission targets at lowest costs. Alternatively, other ways of agricultural emissions pricing should be considered given the significance of agriculture in the country’s emissions.

• High – and in the case of nitrogen increasing – nutrient balances risks the sector’s environmental sustainability. Continued high nutrient surpluses may damage the health of soils, ground- and surface waters and, indirectly, that of the population. It may also contribute to low productivity growth. New Zealand should evaluate existing efforts and, if needed, implementing additional measures, such as regulatory approaches or results-based programmes, to improve environmental outcomes.

Development of support to agriculture

Table 21.1. New Zealand: Estimates of support to agriculture

Million USD

	1986-88	2000-02	2022-24	2022	2023	2024p
Total value of production (at farm gate)	4 070	6 378	21 412	21 913	20 423	21 899
of which: share of MPS commodities (%)	72.09	73.07	71.68	73.55	72.03	69.46
Total value of consumption (at farm gate)	1 625	2 592	11 314	10 666	10 345	12 932
Producer Support Estimate (PSE)	424	33	272	151	314	352
Support based on commodity output	54	15	217	118	220	311
Market price support¹	53	15	217	118	220	311
Positive market price support	53	15	217	118	220	311
Negative market price support	0	0	0	0	0	0
Payments based on output	1	0	0	0	0	0
Payments based on input use	179	17	26	29	33	16
Based on variable input use	2	0	0	0	0	0
with input constraints	0	0	0	0	0	0
Based on fixed capital formation	154	0	0	0	0	0
with input constraints	0	0	0	0	0	0
Based on on-farm services	24	17	26	29	33	16
with input constraints	0	0	0	0	0	0
Payments based on current A/An/R/I, production required	26	1	30	4	61	25
Based on Receipts / Income	26	1	30	4	61	25
Based on Area planted / Animal numbers	0	0	0	0	0	0
With input constraints	0	0	0	0	0	0
Payments based on non-current A/An/R/I, production required	165	0	0	0	0	0
Payments based on non-current A/An/R/I, production not required	0	0	0	0	0	0
With variable payment rates	0	0	0	0	0	0
with commodity exceptions	0	0	0	0	0	0
With fixed payment rates	0	0	0	0	0	0
with commodity exceptions	0	0	0	0	0	0
Payments based on non-commodity criteria	0	0	0	0	0	0
Based on long-term resource retirement	0	0	0	0	0	0
Based on a specific non-commodity output	0	0	0	0	0	0
Based on other non-commodity criteria	0	0	0	0	0	0
Miscellaneous payments	0	0	0	0	0	0
Percentage PSE (%)	10.16	0.52	1.28	0.69	1.53	1.60
Producer NPC (coeff.)	1.01	1.00	1.01	1.01	1.01	1.01
Producer NAC (coeff.)	1.11	1.01	1.01	1.01	1.02	1.02
General Services Support Estimate (GSSE)	119	85	358	360	368	345
Agricultural knowledge and innovation system	60	46	143	147	144	140
Inspection and control	31	28	198	189	211	195
Development and maintenance of infrastructure	27	11	16	24	13	11
Marketing and promotion	0	0	0	0	0	0
Cost of public stockholding	0	0	0	0	0	0
Miscellaneous	0	0	0	0	0	0
Percentage GSSE (% of TSE)	20.97	71.96	55.45	68.05	52.30	49.48
Consumer Support Estimate (CSE)	-53	-14	-201	-100	-196	-306
Transfers to producers from consumers	-51	-14	-214	-118	-217	-307
Other transfers from consumers	-2	0	0	0	0	0
Transfers to consumers from taxpayers	0	0	13	18	22	1
Excess feed cost	0	0	0	0	0	0
Percentage CSE (%)	-3.37	0.53	-1.79	0.94	-1.90	-2.37
Consumer NPC (coeff.)	1.03	1.01	1.02	1.01	1.02	1.02
Consumer NAC (coeff.)	1.03	1.01	1.02	1.01	1.02	1.02
Total Support Estimate (TSE)	542	118	643	529	704	698
Transfers from consumers	53	14	214	118	217	307
Transfers from taxpayers	492	105	429	411	486	391
Budget revenues	-2	0	0	0	0	0
Percentage TSE (% of GDP)	1.50	0.21	0.26	0.22	0.28	0.27
Total Budgetary Support Estimate (TBSE)	490	103	427	410	483	387
Percentage TBSE (% of GDP)	1.36	0.18	0.17	0.17	0.19	0.15
GDP deflator (1986-88 = 100)	100	137	240	229	241	249
Exchange rate (national currency per USD)	1.71	2.25	1.62	1.58	1.63	1.65

Note: p: provisional. NPC: Nominal Protection Coefficient. NAC: Nominal Assistance Coefficient. A/An/R/I: Area planted/Animal numbers/Receipts/Income. 1. Market Price Support (MPS) is net of producer levies and excess feed cost. MPS commodities for New Zealand are: wheat, maize, oats, barley, milk, beef and veal, sheep meat, wool, pig meat, poultry and eggs.

Source: OECD (2025), “Producer and Consumer Support Estimates”, OECD Agricultural policy monitoring (database), https://data-explorer.oecd.org/.

Policy landscape

Main policy instruments

Agricultural policies in New Zealand predominantly focus on biosecurity controls, measures supportive of the indigenous people Māori, and agricultural research and development.

Market and trade regulations

Practically all New Zealand’s agricultural production and trade is free from economic regulation. Export rights of some dairy products to certain markets with import quotas have been allocated to dairy companies based on the share of milk solids collected from farmers. Export regulations are in place for kiwifruit: the New Zealand company Zespri has the default right, although not an exclusive right, to export kiwifruit to all markets other than Australia.1

New Zealand currently has 16 Free Trade Agreements (FTAs) in force. Approximately 73% of New Zealand’s agro-food exports went to FTA partner countries during 2022-24. In the same period, 80% of its agro-food imports came from FTA partner countries. These shares are similar to New Zealand’s non-agro trade with FTA partners (72% of exports and 83% of imports).

Biosecurity and food safety

All agro-food business operates under the Food Act 2014, which applies a risk-based approach focused on safe and suitable food. It aligns the domestic food system with the risk-based approach of other New Zealand food statutes that have more of an export focus and with international trends in food regulation.

The Biosecurity Act 1993, together with the Animal Products Act 1999, the Agricultural Compounds and Veterinary Medicines Act 1997, and the Food Act 2014, defines the legal obligations of food importers. Import Health Standards (IHS) issued under the Biosecurity Act set the requirements for importing risk goods into New Zealand.2 Risk goods, including animal and plant products, can be imported only with an IHS in place for the product, and with the product meeting all relevant IHS measures. For some products (e.g. table eggs, uncooked chicken meat, honey), no IHS is in place. These products therefore cannot be imported, leading to some market price support as their domestic prices are above the world market level.

The Government Industry Agreement for Biosecurity Readiness and Response (GIA) established an integrated approach through voluntary partnerships between the government and primary industry sector groups to manage pests and diseases that could damage New Zealand’s primary industries, economy, and the environment. Signatories share decision-making responsibilities and costs in preparing for and responding to biosecurity incursions. In total, the number of industry groups partnering with the Ministry for Primary Industries under GIA now stands at 24.3

Farm assistance services

Under the Commodity Levies Act 1990, “industry good” activities (such as research and development, forming and developing marketing strategies, and providing technical advice) are managed by industry organisations and funded by levies collected from producers.4 Levies can only be imposed when approved by producers, who also decide how to spend them.

Policies for Indigenous peoples

Key measures to enable Māori to retain and manage collectively-owned land include the Te Ture Whenua Māori Act 1993 and a Māori Land Court. New Zealand has also returned land and other resources to Māori tribal entities through a process of negotiated settlements as compensation for breaches of the 1840 Treaty of Waitangi, with most Māori tribes having completed their settlements.

In addition, five specific Māori Agribusiness investment programmes have been developed by the government to help Māori develop their land and agricultural assets, typically less-developed when compared to New Zealand industry standards. These programmes are administered by a team of regional Māori Agribusiness advisers and provide funding for measures such as land-use assessments and business feasibility studies along with support to reduce agricultural GHG emissions.

Sustainability policies

The Sustainable Land Management Hill Country Erosion Programme (HCEP) aims to protect New Zealand’s estimated 1.4 million ha of pastoral hill country classified as erosion prone. It funds regional councils to develop and deliver four-year erosion control programmes, co-funded by councils and landowners. Funded activities within the current period 2023-27 include:

• developing farm-scale erosion control plans in collaboration with landowners

• wide-spaced planting of poplars and willows as agroforestry

• land retirement from production to revert to native vegetation

• small-scale forest-based activities

• regional training and resourcing for delivering targeted erosion control programmes.

Although the main purpose of the HCEP is to reduce erosion and to build on-farm resilience, it also aims to reduce sediment loss to waterways, increase on-farm biodiversity, enhance climate change adaptation, and contribute to carbon sequestration.

As part of the One Billion Trees programme aiming to double previous tree planting rates over the decade 2018-28, the One Billion Trees Fund was launched in November 2018. The fund provides tree planting grants to landowners, including farmers, and supports partnership initiatives to help overcome the barriers to tree planting.

The Sustainable Food and Fibre Futures (SFF Futures), is a public co-investment programme that finances projects to create value and improve sustainability in the food and fibre industries. SFF Futures’ budget supports projects ranging from less than NZD 100 000 (USD 60 500) to multimillion-dollar, multi-year programmes to enables farmers, growers, harvesters, and industry to generate economic, environmental and social benefits. All projects require co-funding from the partner organisation of at least 60% of costs with some flexibility considered for non-commercially driven projects.

Climate change mitigation and adaptation

Due to the prevalence of livestock-based agriculture and the large share of renewable sources in the electricity mix, primary agriculture is responsible for about half of New Zealand’s gross greenhouse gas (GHG) emissions, mostly in the form of methane from dairy, sheep, and beef cattle.

New Zealand’s second Nationally Determined Contribution (NDC) under the Paris Agreement, submitted in January 2025, covers the period 2031-35. Building on the first updated NDC that committed to halve New Zealand’s national net GHG emissions by 2030 relative to gross 2005 levels, the new NDC sets to reduce net GHG emissions by 51–55 % below gross 2005 levels by 2035. Both NDCs set economy-wide targets, which, among others, cover agriculture and other land use sectors.

The Zero Carbon Amendment Act 2019 (Zero Carbon Act) made changes to the Climate Change Response Act 2002 (Climate Change Response Act), which sets separate long-term emission reduction targets for long-lived and short-lived GHG emissions, including a target for biogenic methane. In particular, the emissions reduction targets set out in the Zero Carbon Act aim to reduce all GHG emissions, except biogenic methane, to net zero by 2050; and reduce gross biogenic methane emissions to 10% below 2017 levels by 2030 and 24-47% by 2050.5 The Climate Change Response Act requires the government to set legally binding carbon budgets, which define the maximum amount of GHG emissions the country, including the agriculture sector can produce over five-year consecutive periods. Emissions reduction plans, including specific sections for agriculture, set out New Zealand’s plans for meeting the emissions budgets (see section on policies for trade and sustainability below). While not required by the legislation, the first emissions reduction plan set sub-sector targets, including for agriculture (New Zealand Government, 2022[1]). However, this was not replicated in the second emissions reduction plan (New Zealand Government, 2024[2]).

The New Zealand Emissions Trading Scheme (NZ ETS) is an emissions pricing tool for the New Zealand economy and a key component of New Zealand’s climate change response. Eligible forests can be recognised for their carbon sequestration in the NZ ETS. However, other than non-farm activities such as transport, or the energy used to process, agricultural activities are not part of the NZ ETS.6

Research and innovation for agricultural emission reduction

The government invests in emission-related tools and technologies to reduce agricultural emissions through three main components: AgriZero^NZ (see next section), the Global Research Alliance (GRA), and the New Zealand Agricultural Greenhouse Gas Research Centre (NZAGRC).

The GRA, a network of 68 member countries and 29 partner organisations,7 was established in 2009.8 New Zealand hosts the Secretariat and GRA Special Representative, and co-chairs its Livestock Research Group. The GRA facilitates collaborative and evidence-based dialogue and knowledge sharing. GRA members collaborate on the research, development and extension of technologies and practices to deliver more climate-resilient food systems without growing GHG emissions. New Zealand builds future capability and capacity through running training programmes and supporting GRA scholarship programmes in developing countries. The New Zealand Climate Smart Agriculture Programme supports measuring and monitoring agricultural emissions in South-East Asia, southern and eastern Africa, Latin America and the Caribbean. New Zealand also funds international collaborative efforts to accelerate global research on mitigating GHG emissions from agriculture, especially for pastoral livestock farming, and has co-funded and participated in international research projects to decrease agricultural emissions.

Established in 2009, the NZAGRC funds pre-commercialisation research into ruminant methane, nitrous oxide and farm systems to reduce emissions. Investments, partly co-funded by industry, focus on indicators for breeding low-methane sheep and cattle, novel methane and nitrous oxide inhibitors, methane vaccines and possible combinations of new mitigation technologies.

Policies for trade and sustainability in agro-food markets

Several of New Zealand’s FTAs include sections related to promoting the sustainability of traded agricultural products. For instance, the FTAs with Korea, with the United Kingdom and with the European Union all include environmental co-operation provisions covering, among others, sustainable agriculture. Such co-operation could include topics such as environmental and natural resource management, sustainable and conservation farming techniques, sustainable methods for improving agricultural productivity, the sustainable use of ecosystems and natural resources in agricultural systems, organic agriculture, reducing environmental risks related to the use of farm inputs, agricultural climate change adaptation and resilience, research on measuring and reducing agricultural GHG emissions, healthy, sustainable and nutritious diets, food loss and waste, or the reduction of adverse environmental effects of policies linked to food systems (Frezal and Deuss, 2025[3]).

The FTAs with the European Union and with the United Kingdom also both include provisions related to domestic environmental policies. They establish specific committee (NZ-EU FTA) or sub-committee (NZ-UK FTA) to oversee the implementation of the FTAs’ Sustainable Food Systems and Environment Chapters, respectively (Frezal and Deuss, 2025[3]). Moreover, these agreements include several agricultural products, such as wool and some other natural fibres, within the list of environmentally preferable products (EPP) which benefit from specific liberalisation commitments (Yamaguchi and van der Ven, 2025[4]).

The Agreement on Climate Change, Trade and Sustainability (ACCTS), signed in 2024 by Costa Rica, Iceland, New Zealand, and Switzerland, includes commitments to promote the liberalisation of research and experimental development services on agricultural sciences that can be key to addressing environmental concerns (such as services related to organic agriculture and to the sustainable use and reduced risks of pesticides and fertilisers), along with other services related to agriculture.

Given the strong export focus of New Zealand’s agriculture, emission reductions have direct implications for the country’s trade performance. While the first emissions reduction plan (ERP1) sets out the policies and strategies to meet the first emissions budget for the period 2022-25, the second emissions reduction plan (ERP2), published in December 2024, sets out the policies and strategies for meeting second emissions budget for the period 2026-2030, thereby setting the foundation to meet its legislated climate change target. In particular, it includes a chapter on agriculture covering several actions:

• reviewing the methane science and New Zealand’s methane target

• accelerating the development of mitigation tools and technologies to reduce on-farm emissions

• developing the measurement of on-farm emissions for use by 2025

• implementing a fair and sustainable pricing system for on-farm emissions by 2030.

Established in February 2023, AgriZero^NZ is a public-private joint venture to drive development and commercialisation of emissions-reduction products for New Zealand farms. Industry and the Government have so far committed NZD 191 million (USD 116 million) over four years. AgriZero^NZ aims to make at least two new mitigation tools available by 2028, and to enable development and adoption of solutions to drive towards near-zero methane and nitrous oxide emissions by 2040. To date, investments include a slow-release, biodegradable, methane-inhibiting bolus, probiotics and natural enzymes, a methane vaccine and methane inhibitors.

A government-developed standardised farm-level approach for estimating biogenic emissions was released in December 2024. It aims to ensure that estimates are transparent, consistent, up to date and scientifically robust, and is key to supporting the government’s commitment to measurement by 2025. Standardising emissions estimation supports the supply chain and product claims New Zealand exporters are making in international markets while representing a step towards pricing emissions in the future.

Recent policy developments

Domestic policy developments in 2024-25

On 1 January 2025, the Mycoplasma Bovis National Pest Management Plan came into effect, transitioning responsibility for delivering the 10-year Mycoplasma Bovis eradication programme from MPI to the management agency OSPRI. The goal of the Management Plan is to eradicate the disease from New Zealand. OSPRI is continuing to carry out background surveillance to monitor the disease status of the national herd, aiming to achieve confidence that the disease is absent by 30 June 2028, as originally planned.

In December 2024, the H7N6 strain of high pathogenicity avian influenza (HPAI) was detected at a commercial egg farm in rural Otago. Biosecurity controls were put in place at the farm to prevent any possible spread. All chickens on the farm were culled. Extensive testing and monitoring of chicken farms linked to the property were carried out. Immediately following the detection, New Zealand suspended certification of live and raw poultry commodities to markets requiring freedom from HPAI, and efforts were made to protect as much of New Zealand’s existing trade as possible. Since then, the export of some poultry products has resumed, including chicken meat, dried pet food, and dog rolls that meet avian influenza heat treatment requirements. As of late April 2025, movement controls have been lifted following the successful eradication of the H7N6 strain of HPAI in New Zealand.

In calendar year 2024, the Māori Agribusiness programmes provided approximately NZD 8 million (USD 4.8 million) in grant funding to support Māori agricultural developments. An increased focus was on developments that aim to reduce agricultural GHG emissions and adapt to a changing climate, while maintaining farm productivity and sustainability.

Trade policy developments in 2024-25

On 1 May 2024, the New Zealand-European Union Free Trade Agreement entered into force. As one of the first FTAs globally, it includes a Sustainable Food Systems chapter. It also provides for tariff eliminations and reductions for key export products of New Zealand (see (OECD, 2024[5]) for more details).

In January 2025, the New Zealand-United Arab Emirates Comprehensive Economic Partnership Agreement (CEPA) was signed. The CEPA foresees the elimination of duties on 98.5% of New Zealand’s exports immediately on entry into force, rising to 99% within three years. This includes all of New Zealand’s major agricultural exports. The CEPA also includes chapters on intellectual property, sustainable development, labour, sustainable agriculture, climate, and indigenous trade. The CEPA includes provisions that reflect the opportunities for Māori, including a dedicated co‑operation chapter and by reducing regulatory barriers Māori businesses may encounter. As with other trade agreements, New Zealand’s Treaty of Waitangi exception is included.9 The New Zealand-United Arab Emirates CEPA is New Zealand’s first FTA with a Middle Eastern country.

In October 2024, New Zealand’s free trade agreement negotiations with the Gulf Cooperation Council (GCC) concluded. When this Agreement enters into force, New Zealand will join a small number of countries, and will be the first major agriculture exporter, with preferential access into the GCC market. The GCC economies are New Zealand’s seventh largest export market. New Zealand’s exports to the GCC were worth NZD 2.6 billion (USD 1.6 billion) in the year to June 2024, of which NZD 0.9 billion (USD 0.54 billion) were agricultural products (including dairy, meat, and horticulture).

The Agreement on Climate Change, Trade and Sustainability (ACCTS) was signed in November 2024 by Costa Rica, Iceland, New Zealand, and Switzerland. ACCTS represents a trade agreement which includes commitments to promote the liberalisation of research and experimental development services on agricultural sciences relevant to environmental concerns (see trade and sustainability section above).

Policy context

Key economic and agricultural statistics

New Zealand is a relatively small and sparsely populated country with a per capita GDP that is slightly above the OECD average. Its high degree of market openness is related to its dependency on international trade. Agriculture has a comparatively high, albeit slowly shrinking, importance to the economy, accounting for around 6% of both GDP and employment. Moreover, agro-food products account for more than two-thirds of New Zealand’s total exports.

With little arable land, grass-fed livestock products represent the backbone of the agricultural sector, and livestock products account for 75% of its total production value. New Zealand is the world’s largest exporter of sheep meat, and among the largest exporters of dairy products. Beef, fruit and horticultural products also contribute significantly to the country’s agro-food exports.

Table 21.2. New Zealand: Contextual indicators

	New Zealand		International comparison
	2000*	2023*	2000*	2023*
Economic context			Share in total of all countries
GDP (billion USD in PPPs)	83	279	0.2%	0.2%
Population (million)	4	5	0.1%	0.1%
Land area (thousand km2)	263	263	0.3%	0.3%
Agricultural area (AA) (thousand ha)	12 340	9 747	0.4%	0.3%
			All countries1
Population density (inhabitants/km2)	15	20	52	64
GDP per capita (USD in PPPs)	21 458	53 176	9 368	29 013
Trade as % of GDP	24.5	18.3	12.3	14.9
Agriculture in the economy			All countries1
Agriculture in GDP (%)	8.3	6.3	2.9	3.5
Agriculture share in employment (%)	8.5	5.6	-	-
Agro-food exports (% of total exports)	50.7	68.2	6.4	8.1
Agro-food imports (% of total imports)	7.9	11.3	5.8	7.3
Characteristics of the agricultural sector			All countries1
Crop in total agricultural production (%)	17.7	24.8	-	-
Livestock in total agricultural production (%)	82.3	75.2	-	-
Share of arable land in AA (%)	3.3	5.5	31.8	33.3

Note: *or closest available year.

1. Average of all countries covered in this report.

Sources: OECD statistical databases; International Labour Organisation (ILO); UN Comtrade; World Bank, WDI; FAO database and national data.

New Zealand has a stable economy having experienced growth and relatively low inflation for most of the past decade. However, after rebounding from the COVID-19 related recession to a growth rate above 6% in 2021, the globally difficult economic situation due to Russia’s war of aggression in Ukraine reduced GDP growth in 2022 and 2023 to rates below 2%, while inflation peaked at close to 7.2% before declining to just under 3%, still a relatively high level compared to those seen in recent decades.

New Zealand is a consistent and growing net exporter of agro-food products. After some drops in 2015 and 2016 due to, among others, lower dairy prices, its agri-food exports have picked up again since 2017 and reached new record levels in 2022. Most of New Zealand’s agro-food trade, and in particular of its exports, is processed food for final consumption. On the import side, however, intermediary products represent nearly half of the trade basket.

New Zealand’s growth in agricultural output over the 2013-22 decade has been below the global average, driven by a slight productivity decline: against an increase (albeit slow) at the global level, and in contrast to a 2% p.a. increase between 1991 and 2000, total factor productivity (TFP) in New Zealand fell by an average of 0.3% p.a.

Agriculture is responsible for half of New Zealand’s GHG emissions. This is due to the dominant role of dairy and ruminant meat production and to the large share of renewables in electricity generation, among other factors. Almost three-quarters of agricultural emissions are in the form of enteric methane from ruminant livestock. Nutrient surpluses are also well above the respective OECD averages, although the phosphorous balance has declined somewhat from its levels in the 1990s. The sector is also the main user of freshwater as irrigated land has expanded, partly in response to climate related uncertainties. Nonetheless, its overall level of water stress, while higher than in the 1990s, is relatively low.

Table 21.3. New Zealand: Productivity and environmental indicators

	New Zealand		International comparison
	1991-2000	2013-2022	1991-2000	2013-2022
			World
TFP annual growth rate (%)	2.0%	-0.3%	1.7%	0.8%
			OECD average
Environmental indicators	2000*	2023*	2000*	2023*
Nitrogen balance, kg/ha	36.7	57.9	32.0	29.7
Phosphorus balance, kg/ha	13.2	5.4	3.3	2.5
Agriculture share of total energy use (%)	3.6	4.8	1.7	2.0
Agriculture share of GHG emissions (%)	49.5	49.2	8.7	10.1
Share of irrigated land in AA (%)¹	3.0	7.7	-	-
Share of agriculture in water abstractions (%)	..	61.7	47.0	49.5
Water stress indicator	0.7	3.0	8.7	..

Note: * or closest available year.

1. Data are not comparable between time periods due to change in methodology.

Sources: USDA Economic Research Service, Agricultural Productivity database; OECD statistical databases; FAO database and national data.

Historical trends in agricultural policies

Prior to the 1970s, New Zealand exported more than half its agricultural production to the United Kingdom and support for agricultural producers was largely non-existent except for some import-competing sectors such as eggs and poultry. At the same time, New Zealand’s Statutory Marketing Boards, operating since the end of World War I, enjoyed significant rights to regulate the supply and trade of several key export products. Overall, relative to the more protected manufacturing sectors, agriculture was implicitly taxed (Anderson et al., 2008[6]).

The accession of the United Kingdom to the European Economic Community in 1973 weakened New Zealand’s access to its most important market, and the oil shock of the mid-1970s generated significant foreign exchange shortfalls given the country’s dependence on oil imports. In response, the government introduced policy measures to support agricultural production (MPI, 2017[7]). These included input subsidies, minimum prices supported by import barriers and export incentives, tax concessions, low-interest loans and development grants (MPI, 2017[7]; Harris and Rae, 2004[8]).

In response to macroeconomic problems, including the substantial fiscal burden of these support measures, a new government implemented significant economic reforms during the second half of the 1980s. By the end of that decade, production and trade distorting policies supporting the farm sector practically disappeared (Table 21.4). In the context of these reforms, New Zealand’s Statutory Marketing Boards lost most of their authority or were dissolved (Nayga and Rae, 1993[9]).

Table 21.4. New Zealand: Agricultural policy trends

Period	Broader framework	Changes in agricultural policies
Prior to 1975	Export-oriented agriculture with little policy intervention. Implicit taxation notably of exporting agriculture relative to the manufacturing sector	Statutory Marketing Boards with significant authority to regulate production and trade of key export products Agricultural and manufacturing import tariffs Limited farm support, including some input subsidies
1975-1984	Incentivising agricultural production	Introduction of significant farm support measures: price support, input subsidies, tax concessions, low-interest loans, development grants
Late 1980s	Reforms to market and trade liberalisation	Dismantling of price support and most other forms of direct farm support, along with economy-wide reforms liberalising the manufacturing industry as well Restricted function or dismantling of the Statutory Marketing Boards. Exit packages and debt restructuring programmes for farmers who had to stop operating
1990-present	Continuing trade liberalisation	Focus on general services and disaster aid

Since the policy reforms of the late 1980s, New Zealand’s level of support to agricultural producers has been the lowest among OECD countries (Figure 21.7). For the last almost 20 years, PSE has been consistently below 1% of gross farm receipts. While this low support has been dominated by SPS-related market price support, most of the budgetary producer support has consistently been provided for livestock disease control. Most of the support for the sector, however, has consistently been in the form of provision of general services to the sector, notably through the agricultural knowledge and innovation system and related to the country’s biosecurity controls for pests and diseases.

References

[6] Anderson, K. et al. (2008), “Distortions to Agricultural Incentives in Australia and New Zealand”, Agricultural Distortions Working Paper, No. 09, World Bank, Washington, DC, https://openknowledge.worldbank.org/handle/10986/28184.

[3] Frezal, C. and A. Deuss (2025), “Trade-related measures linked to the environmental sustainability of agriculture: A stocktake and typology”, OECD Food, Agriculture and Fisheries Papers, No. 216, OECD Publishing, Paris, https://doi.org/10.1787/ebfdca09-en.

[8] Harris, D. and A. Rae (2004), “Agricultural Policy Reform and Industry Adjustment in Australia and New Zealand”, Conference paper for International Agricultural Trade Research Consortium, Philadelphia, 6-7 June 2004, https://doi.org/10.22004/ag.econ.15762.

[10] Ministry for Primary Industries (2012), An Evaluation of Compulsory Levy Frameworks for the Provision of Industry-good Goods and Services: A New Zealand Case Study, https://www.mpi.govt.nz/dmsdocument/3736/direct.

[7] MPI (2017), New Zealand Agriculture. A policy perspective, Ministry for Primary Industries, New Zealand, https://www.mpi.govt.nz/dmsdocument/27282/direct.

[9] Nayga, R. and A. Rae (1993), “New Zealand’s statutory marketing boards: Their history and some recent developments”, Journal of Food Distribution Research, Vol. 24, pp. 94-100, https://core.ac.uk/download/pdf/6988122.pdf.

[11] New Zealand Foreign Affairs & Trade (n.d.), Preserving our right to regulate, https://www.mfat.govt.nz/en/trade/nz-trade-policy/preserving-our-right-to-regulate.

[2] New Zealand Government (2024), “Out journey towards net zero. New Zealand’s second emissions reduction plan 2026-30”, https://environment.govt.nz/assets/publications/climate-change/ERP2/New-Zealands-second-emissions-reduction-plan-202630.pdf.

[1] New Zealand Government (2022), “Towards a productive, sustainable and inclusive economy. Aotearoa New Zealand’s First Emissions Reduction Plan”, https://environment.govt.nz/assets/publications/Aotearoa-New-Zealands-first-emissions-reduction-plan.pdf (accessed on 6 March 2025).

[5] OECD (2024), Agricultural Policy Monitoring and Evaluation 2024: Innovation for Sustainable Productivity Growth, OECD Publishing, Paris, https://doi.org/10.1787/74da57ed-en.

[4] Yamaguchi, S. and C. van der Ven (2025), “Exploring synergies between environmental labelling and standards, and trade in environmental goods”, OECD Trade and Environment Working Papers, No. 2025/01, OECD Publishing, Paris, https://doi.org/10.1787/9a40f937-en.

Notes

← 1.  Other traders can export kiwifruit to markets other than Australia in collaboration with Zespri, subject to approval by Kiwifruit New Zealand, the relevant regulatory body.

← 2.  Risk goods are any items that may constitute, harbour, or contain an organism that may cause unwanted harm to natural or physical resources, or to human health in New Zealand (https://www.mpi.govt.nz/import/importing-into-nz-how-it-works/import-health-standards).

← 3.  Three more industry groups, which have not signed the deed, are represented by other signatories.

← 4.  Activities that are “non-rival and non-excludable (including where the cost of exclusion is prohibitively high), and where the benefits accrue to members of a particular industry”. Commercial and trading activities are not included, to avoid competition between private enterprise and industry organisations (Ministry for Primary Industries, 2012[10]).

← 5.  The 2050 bionic methane target is currently being reviewed by the Climate Change Commission as well as an independent ministerial advisory panel.

← 6.  In particular, activities undertaken by agricultural processes (e.g. importing or manufacturing synthetic nitrogen fertilisers, slaughtering ruminate animals and dairy processing of milk or colostrum) and farmers (e.g. purchasing synthetic fertiliser containing nitrogen for application to land and farming ruminant animals for reward; or the purpose of trade), for which previously reporting and surrender obligations were going to be included in the NZ ETS, have been removed from the ETS with the Climate Change Response (Emissions Trading Scheme Agricultural Obligations) Amendment Act in November 2024.

← 7.  See the GRA website. In addition, the GRA partners with the International Panel on Climate Change by being an Official Observer to it.

← 8.  Other funders of the GRA include the Climate Change, Agriculture and Food Security programme of the Consultative Group on International Agricultural Research (CGIAR-CCAFS) and the government of the Netherlands.

← 9.  The Treaty of Waitangi exception protects the government’s ability to adopt policies that fulfil its obligations to Māori, including under the Treaty of Waitangi, without being obliged to offer equivalent treatment to New Zealand’s trading partners (New Zealand Foreign Affairs & Trade, n.d.[11]).